Benchmark index snaps four-week losing streak

2018-01-07

The Nepal Stock Exchange (Nepse) index fluctuated wildly in the last trading week between December 31 and January 4. The secondary market index, however, managed to land in the green, after recording four consecutive week-on-week losses.

During the review period, the market index went up by 9.05 points or 0.64 per cent. Similarly, sensitive and the float indices also saw minimal gains. The sensitive index rose by 2.04 points or 0.69 per cent to 299.66 points and the float index inched up by 0.91 points or 0.9 per cent to 102.25 points.

The benchmark index had opened at 1,414.78 points on Sunday and slumped by 24.2 points to retreat below 1,400-point threshold by the time of closing — around a nine-month low. Meanwhile, the market bounced back to 1,434.8 points on Monday and edged up to 1,437.24 points on Tuesday. But, Nepse index reversed course on Wednesday and fell by 20.63 points to 1,416.61 points. Even with a minimal gain of 7.22 points to 1,423.83 points on Thursday, the local bourse managed to land in the green for the trading week.

Market analysts said the secondary market was affected by some technical as well as external factors in the last week and this situation may continue in the next few days too.

Bhism Raj Chalise, chief executive officer of Kathmandu Capital, said the market volatility could be attributed to profit-booking by short-term investors. “Long-term investors are holding on to their shares, however short-term investors went on a selling spree. On one hand, there is excess supply of shares in the market while on the other hand, selling pressure resulted in volatility,” Chalise explained.

He also added that the political situation is yet to normalise after the elections, which may have affected investors’ psychology. “Even as the elections concluded peacefully, the date to form a new government is yet to be decided. In the meantime, banks have come under pressure to raise their deposits,” Chalise said. “All these reasons have contributed to wild fluctuations in the secondary market.”

The sub-index of commercial banks advanced by 26.37 points or 2.19 per cent to 1,231.91 points in the review period. Stock market price of Everest Bank went up by 9.27 per cent to Rs 872 per unit, share price of Himalayan Bank rose by 5.92 per cent to Rs 644 per unit and secondary market price of Nepal Investment Bank inched up by 1.54 per cent to Rs 659 per unit.

Similarly, sub-index of hotels group jumped by 28.29 points or 1.38 per cent to 2,115.75 points. Share price of Oriental Hotel rose by 1.54 per cent to Rs 659 per unit. Likewise, the sub-index of manufacturing group went up by 21.24 points or 0.85 per cent to 2,525 points.

The sub-index of insurance sector inched up by 9.01 points or 0.12 per cent to 7,305.14 points, the finance subgroup went up by 4.54 points or 0.62 per cent to 733.02 points and microfinance subgroup edged up by 5.29 points or 0.31 per cent to 1,724.54 points.

Meanwhile, four subgroups landed in the red during the week. The sub-index of others group fell by 6.73 per cent or 55.81 points or 773.36 points, weighed down by Nepal Telecom losing 7.71 per cent to Rs 778 per unit.

Similarly, hydropower sector descended by 2.95 points or 0.15 per cent to 1,915.75 points, sub-index of trading subgroup dropped by 5.66 points or 2.88 per cent to 190.71 points and the development banks shed 0.44 points or 0.03 per cent to 1,595.95 points in the review period.

Altogether, 6.48 million shares of 179 companies worth Rs 2.71 billion were traded through 27,583 transactions during the week. The traded amount was 0.91 per cent more than the total weekly turnover of the previous week.

Standard Chartered Bank secured the top position in terms of total turnover with Rs 173.83 million. It was followed by Prabhu Bank with Rs 171.21 million, Asian Life Insurance Company (Promoter Share) with Rs 122.7 million, Nepal Credit and Commerce Bank (Promoter Share) with Rs 96.96 million and Nepal Life Insurance Company with Rs 93.6 million.

Prabhu Bank topped the list in terms of trading volume, with 534,000 of its shares changing hands and Standard Chartered Bank was the forerunner in terms of number of transactions with 2,757.